Every January, employers go into high gear to prepare H-1B cap-subject petitions for filing on the first business day of April.  This year, employers must also monitor for potential regulatory changes to the filing process.  On December 3, 2018, the Department of Homeland Security (DHS) published a notice of proposed rulemaking in the Federal Register titled “Registration Requirement for Petitioners Seeking To File H-1B Petitions on Behalf of Cap-Subject Aliens.”  The 30-day public comment period closed January 2, 2019, and employers remain in wait for the impact to this year’s cap-subject filings.  While President Trump tweeted about H-1B changes that “are soon coming,” it is not clear whether they relate to the proposed rule.

The proposed rule seeks to accomplish two goals: streamline the H-1B selection and filing process by creating a pre-registration system, and increase the chances of selection for H-1B petitions eligible for the advanced degree exemption by reversing the order in which the cap lotteries are run.

US Citizenship & Immigration Services (the agency responsible for immigration benefits within DHS) received over 800 comments on the proposed regulation, including comments from the US Chamber of Commerce, the American Medical Association, and the American Immigration Lawyers Association.  The public comments criticize the proposed timeline and logistics, identify impacts stretching beyond immigration law, and suggest that the proposed rule may face court challenges if implemented:

  • Regarding the impact on small businesses: “Assuming that USCIS could stand up this new registration system by the middle of March 2019 to provide companies the ability to begin the registration process at least 14 calendar days before petitions can be submitted on April 1, 2019, companies will have an unreasonably short amount of time to comprehend all that the final rule would entail and then prepare to comply with the new requirements under the rule. To that end, small businesses would be particularly hurt if this rule were to be finalized and implemented by next spring in this manner.” Comment from the US Chamber of Commerce (emphasis added).
  • Regarding the impact of the rule on international medical graduates (IMGs) and US healthcare: “The US is facing a serious shortage of physicians largely due to the growth and aging of the population and the impending retirements of many physicians…Nearly 21 million people live in areas of the US where foreign-trained physicians account for at least half of all physicians. As such, the impact of the Proposed Rule on this physician cohort could significantly undermine current efforts to address the worsening physician shortage and directly impact patient populations across the US considered medically underserved.”  Comment from the American Medical Association (emphasis added).
  • Regarding the legality of the proposed change to the cap lottery order: “INA § 214(g)(5) provides that the 65,000 numerical limitation “shall not apply” to any H-1B nonimmigrant who has earned a U.S. advanced degree “until the number of aliens who are exempted from such numerical limitation during such year exceeds 20,000.” (emphasis added). Therefore, because the statute contemplates counting the 20,000 advanced degree exemption first, the proposal to reverse the order of the random selection process is contrary to the statute and would likely be the subject of a court challenge if finalized and implemented.” Comment from the American Immigration Lawyers Association (emphasis added).

What Employers Should Know

Although DHS has published this proposed rule with the aim of implementing the registration process and new lottery order in advance of the April 2019 filing window, there is little time left to finalize the new regulation in this timeframe.  Under the federal rulemaking process, the agency that published the proposed rule reviews all comments received and conducts a comment analysis.  The agency then decides whether to proceed with the rulemaking process, issue a new or modified proposed rule, or withdraw the proposal.  A Final Rule, which is published in the Federal Register, must include a preamble, which includes a response to the significant issues raised in submitted public comments.  In most cases, the Final Rule cannot become effective in less than 30 days.

Because of the rulemaking requirements, the proposed rule’s 30-day registration window announcement requirement, and possible court challenges, the implementation of this rule for the April 2019 cap filing window is far from certain.

Takeaways

Because the implementation of the proposed rule in time for this year’s H-1B cap season is in doubt, employers should prepare to file H-1B petitions under the current system and take the following steps:

  • Proceed with identifying candidates for the H-1B lottery and gathering the necessary information.
  • Complete and submit the required Labor Condition Applications with the Department of Labor.
  • Prepare H-1B petitions for identified candidates without waiting for the announcement of a registration period.
  • Be poised to file all H-1B petitions on April 1, 2019.